Impact of corporate social responsibility practices on employee commitment

This is the Accepted version of the following publication

De Silva, Keshara Manindri and De Silva Lokuwaduge, Chitra (2019) Impact ofcorporate social responsibility practices on employee commitment. Social Responsibility Journal. ISSN 1747-1117

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Impact of Corporate Social Responsibility (CSR) Practices on Employee Commitment

Abstract

Purpose – The purpose of this paper is to critically review the existing literature on corporate

social responsibility (CSR) to develop a framework to analyse the impact of CSR on employee

commitment to the organisation.

Design/methodology/approach – Using the scoping review, this paper reviewed the published

articles on CSR and employee commitment and how CSR and employee commitment were

defined, theoretically supported and conceptualised for a comprehensive understanding of

current and future research directions in the field.

Findings – This paper presents a framework developed through the analysis of existing

literature on the impact of CSR) on employee commitment to the organisation. This framework

aims to explore the impact of internal CSR and external CSR on employee commitment while

using the contractual position of employees as an intervening variable.

Originality/value – During a time where employee attraction and retention is widely discussed

as a competitive advantage, this framework could be used by any industry, especially those

with high staff turnover such as mining. The researchers propose to use this framework to

explore how perception towards external CSR (directed towards external stakeholders) and

perception towards internal CSR (directed towards the own employees) can influence

organisational identification and commitment levels. To address several gaps in the literature,

this model is based on the Maslow’s Hierarchy of Needs and Social-Identity Theory.

Key Words: organisational commitment, Internal CSR, external CSR, employees,

organisational identification

Introduction

Recent research on corporate social responsibility (CSR) emphasises that CSR is an investment

rather than an expense which leads to a sustainable growth in organisations (Zhou et al., 2018;

Jones et al., 2017; Asongu 2007). There is a shift from the traditional concept of increasing

shareholder wealth as the main objective of the organisation towards organisational success

through sustainable growth. CSR is used as a broad concept that makes organisations more

than just profit-seeking entities. CSR needs to be integrated into strategic business practices as

it brings long-term benefits to the organisation and the society as a whole (Zhou et al., 2018;

Bridoux et al., 2016; Skudiene & Auruskeviciene 2012 ). Organisations are using CSR to

strengthen its relationships with their stakeholders to ensure minimum conflicts with the

stakeholders and maximum loyalty from them (Mahmoud et al 2017; Jones et al., 2017; Ali et

al. 2010). Existing research classifies CSR into internal and external, internal CSR which is

aimed at internal operations and internal stakeholders of the company (Shen & Zhang 2019;

Harvey et al., 2017;;) whereas external CSR activities involve external entities and is focused

on external stakeholders (Mahmoud et al 2017; Schons & Steinmeier 2016; ; Basil &

Erlandson 2008; Brammer et al 2007; Peterson, 2004). Zhou et al., (2018) and Heslin & Achoa

(2008) highlighted the strategic significance of CSR for corporate success while some

researchers (Shen & Zhang 2019; Schons & Steinmeier 2016, Al-bdour et al. 2010; Eweje &

Bentley 2006)) identified the importance of internal CSR measures on employee commitment

(Mitonga-Monga & Hoole, 2018). Social-Identity theory and CSR research suggests that CSR

practices of a company could build a strong employee-company (E-C) fit (Shen & Zhang 2019;

Harvey et al.,2017) and organisational-identity to achieve strong employee commitment which

leads to better performance (Mitonga-Monga & Hoole, 2018; Harvey et al., 2017; Mahmoud

et al., 2017 ) and reduced turnover. However, little research so far has focused on identifying

the employee’s perceptions (Jones et al., 2017) towards internal CSR and its influence on the

organisational commitment Mitonga-Monga & Hoole, 2018; Mahmoud et al 2017; Rodrigo et

al., 2016; Rodrigo & Arenas 2008) . The purpose of this study is to present a framework which

integrates the mechanisms through which perceived internal and external CSR activities affect

the organisational commitment.

Aims of the Study

Aim of this study is to analyse existing literature and to develop a conceptual framework that

can test CSR practices and its influence on employee commitment levels. Using scoping review

strategy (Pham et al., 2014), this research aims to understand the influence of both the internal

and external CSR practices on employee commitment levels and how the type of employee

contract held in the organisation can influence their perception towards internal and external

CSR practices as the two main research questions of the study.

During a time where businesses are increasingly becoming interested in employee

attraction, retention and developing their Human Resource as a form of competitive advantage

(Zhou et al., 2018), organisational commitment and its consequential work behaviour (e.g.

labour turnover, job performance and employee health) (Harvey et al., 2017) is significant.

Despite the increasing interest in CSR and financial performance of an organisation (Mahmoud

et al., 2017), its influences on internal stakeholders such as employees have remained largely

neglected (Larson et al 2008; Mahmoud et al 2017). Due to inconsistent results found between

CSR practices and overall performance of an organisation (Luo and Bhattacharya 2006),

literature suggests to focus on the influences of CSR practices on one particular stakeholder

type – Employees (, Harvey et al., 2017; Peterson 2004; Wood & Jones, 1995). CSR can be

categorised into two; internal and external. Another gap in the research is that existing literature

talks about either CSR activities in general or talk about internal and external CSR activities in

isolation, except Brammer et al (2007). Therefore this study aims to explore the various types

of internal and external CSR practices which affect the organisational commitment and to

develop a framework that could be used specifically in industries with very high staff turn over

to analyse employee attitudes toward internal and external CSR practices and how this would

influence organisational commitment levels.

Significance of the Study

CSR has become an exciting topic, more than half of the articles on CSR have been published

in the last decade (Jones et al., 2017). Literature identifies that CSR analysis is quite embryonic

for both academicians and practitioners and thus in need of more frameworks and empirical

evidence (Jones et al., 2017; McWilliams et al. 2006). Moreover, research has focused on

establishing a link between social performance and the overall financial success of

organisations, effectiveness of CSR on the significant internal stakeholder – employees – have

remained largely neglected (Jones et al., 2017; Schons & Steinmeier 2016;; Kim et al. 2010;

Turker 2009; Larson et al. 2008). This study will address these gaps by developing a framework

focusing on the impact of CSR on employees and organisational commitment.

Most of the existing CSR research focuses on organizational identification (Hao et al., 2018;

Liu et al 2017; Hameed et al 2016) as a significant CSR outcome as it is a fundamental construct

that predicts the organisational image and legitimacy (Mahmoud et al., 2017). Collier and

Esteban (2007), Rodrigo & Arenas (2008), Hameed et al., (2016), De Roeck & Farooq (2018)

found that there is a positive relationship between CSR and organizational identification.

Farooq. et al., (2019) identified CSR as an influential factor on staff turnover intentions. The

framework proposed by this current study will contribute to understand how internal and

external CSR expertly and CSR combined affects employees’ commitment.

This study contributes to the literature in several ways. First, it examines how perceived

internal and external CSR actions influence employees' organizational identification. In so

doing, the study shows how alternative underlying mechanisms—perceived external prestige

and perceived internal respect—connect components of CSR and organizational identification.

This study responds to Hameed et al (2016) who emphasized the need to understand such

mechanisms in relation to employee outcomes. Exploring these alternative mediation

mechanisms could also help strengthen firms' capacity for managing the impact of CSR

initiatives (Shen & Zhang 2019; Farooq M et al. 2019 ).This current study argues that CSR

generates a number of mediators that influence organizational commitment as it comprises a

variety of actions taken by the firms, targeting on different types of stakeholder groups (Shen

& Zhang 2019). To better understand how these different types of CSR activities influence

organisational commitment, this study will differentiate internal and external CSR activities.

Scholars have suggested that the impact of CSR on employee commitment depends on

Further this framework explores the perceived external prestige and perceived internal respect,

respectively using social identity theory and Maslow’s hierarchy of needs theory. Perceived

external prestige and perceived internal respect encourage employees (Shen & Zhang 2019) to

identify with their socially responsible organization. Moreover, very little empirical evidence

is available that discusses the employee-company relationship (Shen & Zhang 2019) and

organisational commitment, that too in the CSR context is very limited (Shen & Zhang 2019;

Rodrigo et al 2016; Rodrigo and Arenas, 2008). Understanding these relationships is vital as it

has number of positive outcomes for the organisation, reducing employee turnover, motivation

and attraction (Shen & Zhang 2019; Meyer et al. 2002)). Mitonga-Monga & Hoole, (2018)

conducted a study on manufacturing sector in the Democratic Republic of Congo and found

that employees’ perceptions of corporate ethical values and organisational justice significantly

influence their affective and continuance organisational commitment. According to this study

“when employees perceive their values to be congruent with those of the organisation and they

believe that they are being treated in a fair manner, they will likely develop a consistent desire

to remain with the employing organisation. Upholding ethical values that are observed,

respected, and lived, together with fair and just treatment by the organisation will individual

perception (Rupp et al., 2013; Bridoux et al., 2016; Mahmoud et al 2017,). Glavas and Godwi

(2013) proposes that employees' perception about CSR and its subsequent outcomes are

sensitive to their calling orientation which is a concept derived from Maslow’s hierarchy of

needs theory, that the extent to which employees see their work as a “calling” rather than just

a ‘position” in an organisation (Need of prestige). This proposed framework explore how

employees' calling orientation can strengthen or weaken the perception of internal and external

CSR of the firm and its impact on employees' organizational commitment.

increase employees’ intentions to continue working for the employer (Mitonga-Monga &

Hoole, 2018 pp. 301)

It is difficult to generalise the findings from the existing research to every industry and every

country. Current study endeavours to address these limitations which would not only extend

the existing literature but will be useful for practitioners to better understand the impact of

organisational CSR activities and its influence on employee commitment.

This framework initiates the research which could contribute to both theory and practice

by closely gauging how employees perceive and react to CSR. Even though there is no perfect

measure, employees' calling orientation plays an important role in evaluating such activities.

This implies that managers must consider the differential impact of CSR components on

employees in order to design effective CSR strategies. McWilliams et al. (2006) and Mahmoud

et al (2017) addressed the need for more frameworks and measurements to test CSR. This study

will add to the existing literature by developing a theoretical framework that is needed to

identify the employee perception towards CSR practices of the organisation.

Review of Literature and Theoretical Framework

Various definitions of CSR are seen in the literature. Votaw (1972) stated that CSR “means

something, but not always the same thing, to everybody” (p.25). The definition of the notion

varies and different researchers define it differently, depending on the period of the research

and the ideological belief behind it. Even though there is no so called “true” definition of CSR,

a widely used definition of CSR is Carroll’s (1979) pyramid of CSR, “the social responsibility

of business includes the economic, legal, ethical, and discretionary expectations that society

has of organisations at a given point in time” (p.500). In contrast to this, O’Connor et al (2017)

emphasised the responsibilities beyond the economic and legal obligations of business.

There is a widespread growth of CSR research focussing on its influence on different

stakeholders such as employees, consumers, investors, suppliers, and the government (Shen &

Zhang 2019; O’Connor et al., 2017; Hameed et al 2016). Among all these groups, employees

are vital to any type of CSR research (Shen & Zhang 2019; Mitonga-Monga & Hoole, 2018;

Aguilera et al, 2007) although majority of the CSR research focuses on external stakeholders

such as consumers and investors (Lichtenstein et al., 2004; Luo & Bhattacharya, 2006),

ignoring the importance of employees as a key and integral stakeholder group to any socially

responsible organisation (Shen & Zhang 2019; Larson et al., 2008).

For decades, researchers have investigated the impact of CSR on financial performance of an

organisation (Shen & Zhang 2019; Mahmoud et al., 2017; McWilliams et al. 2006). Most

studies have extensively looked into the link between the effects of CSR on overall

organisational performance in terms of reputation, competitiveness, sustainability (Porter and

Kramer 2002; Johnson 2003). However, research around the impact of CSR on employees is

limited (Kim et al. 2017; Kim et al. 2010; Turker 2009; Larson et al. 2008; Rodrigo and Arenas

2008). Depending on the type of stakeholder it intends to satisfy, CSR can be broadly

categorised into internal and external CSR (Shen & Zhang 2019; Brammer et al. 2007). These

two concepts were defined as internal and external dimensions by the European Commission

(2009) and as actions within and outside the firm (Shen & Zhang 2019; Aguilera et al. 2007).

Few studied taken place during the last decade (Collier and Esteban, 2007; Rodrigo and

Arenas, 2008; Shen & Zhang 2019) showed that employees are concerned with organizational

activities that support external stakeholders, which they perceived as an important part of

developing a positive social image (Shen & Zhang 2019; Rogers & Ashforth, 2017). According

to social identity theory, the aim of enhancing one's self-esteem is achieved by members of an

organization if that organisation is considered highly prestigious by the society which compels

employees’ identification needs with their organization (Ashforth & Mael, 1989; Rogers &

Ashforth, 2017). This perceived external prestige of external CSR translates into employees'

identification (Shen & Zhang 2019) with their organization.

Although the literature differentiates between internal and external CSR, most micro

CSR research examining the impact of CSR on employees' commitment has rarely been tested

(Rogers & Ashforth, 2017). This distinction is important from an employees’ perspective

because perceived internal CSR appears to be self-focused whereas perceived external CSR

activities to be focussed on others (Shen & Zhang 2019) although both aspects of CSR can

affect employees' perception and organisational commitment (Farooq et al., 2019). This

framework focuses on how internal and external CSR produce different pathways through

which CSR builds identification.

Internal CSR

Brammer et al (2007) defined internal CSR as activities that are aimed at internal operations of

the company. Kim et al (2010) identified non-discrimination policies, in-house education and

training as internal CSR dimensions. Employees are provided with good training opportunities,

respect for human rights, work-life balance, treated well in the workplace in the form of health

and wellbeing of employees, this is very much likely to enhance the employee self-image

(Farooq et al., 2019) Similarly Basil and Erlandson (2008) identified code of ethics and health

and safety policies as internal CSR. In addition, Vives (2006) categorised well-being of

workers, equality of opportunities, and work-family relationship as internal CSR.

Al-bdour et al (2010) identified several indicators of the GRI as internal CSR measures,

labour relations, occupational health and safety, diversity and equal opportunity, training and

education. With regard to internal CSR Al-bdour (2010) identified several sections of the UN

convention on Human Rights, child labour, forced labour, health and safety, free association

and collective bargaining, discrimination, disciplinary practices, working hours and

compensation.

Strong link between CSR practices and employee retention can be expected if the CSR

initiatives are impacting the employees directly – internal CSR. Some of those practices are

employment conditions, health and safety, training and education, diversity and equal

opportunities, and the human rights at the workplace (Farooq et al., 2019; Trivellas et al., 2019;

Eweje & Bentley 2006;).

Longo et al. (2005) proposed the grid of values model that provides an in-depth explanation of

internal CSR in the organisation.

1) Health and safety standards

2) Development of workers’ skills through training

3) Employee well-being and quality of work

4) Social equity policies and procedures around work safety and equal opportunity.

Similarly, procedural justice is “the process through which firms evaluate employee

performance and ensure the fair treatment of employees of different gender, race…” (Brammer

et al., 2007 p.10). Furthermore ethical climate is viewed as the construct that assesses the

perception (Shen & Zhang 2019) that “one’s organization has established and maintains an

ethical code through communication and policy” (Stewart et al 2011 p.583). Similar to social

equity literature, ethical climate literature suggests that ethical treatment of employees create a

reason for employees to reciprocate in the same way with their attitudes and behaviours (Shen

& Zhang 2019; Farooq M et al., 2019; Brammer et al. 2007; Rupp et al. 2006; Peterson 2004).

Social-Identity Theory

CSR can influence both existing and potential employees through enhanced reputation

(Turker 2009; Albinger and Freeman, 2000). Organisations would attract employees whose

values and beliefs are similar to that of the company which has been shown to improve

employee job satisfaction (Trivellas et al., 2019; Shen & Benson 2016) and belongingness to

the organisation (Turker 2009). Tajfel (1974) describes this as social-identity theory (SIT).

Social-identity is developed when an individual wants to conform to various norms and

customs of a group that contributes positively to their social identity (Tajfel 1974; Ashforth

and Mael 1989 Rogers & Ashforth, 2017; Farooq M et al., 2019). Organisational

identification can then be seen as essentially a subtype of social identification (Ashforth and

Mael, 1989; Rogers & Ashforth, 2017)

Once an individual identifies with the positive attributes of a company defined by its

existing employees, policies and practices, they identify themselves with the organisation

(Dutton et al. 1994;Shen,& Benson 2016.). High organisational identification can encourage

employee behaviours such as organisational commitment (Marin & Ruiz 2007; Dutton et al.

1994 Shen & Zhang 2019). In addition, both internal and external stakeholders identify and

respect an organization that engages in CSR activities which will significantly improve the

positive image of that organisation ( Luo et al. 2006 Shen & Zhang 2019,).

Maslow’s Hierarchy of Needs Theory

Proposed in 1943 Maslow’s Hierarchy of Needs Theory is a classical depiction of human

motivation based on the assumption that there is a hierarchy of five needs within each

individual as physiological needs, safety needs, social needs esteem needs and self-

actualization needs. Urgency of these needs varies according to the situation but influence the

organisational commitment as a motivation to be attached to the organisation. According to

Maslow, individuals are motivated by unsatisfied needs while physiological and the safety

needs constituted the lower-order needs such as job security, occupational health and safety

(HS) and recognition of the employee effort (Shen, & Benson 2016). Social, esteem, and self-

actualization needs constituted the higher-order needs. These higher-order needs are generally

satisfied within an individual which influence the identity concept.

Organizational identification allows employees to develop a strong, enduring

relationship (developing a feeling of belongingness) with their organization, Dutton et

al.(1991) and Farooq et al.,(2019) explain that organizational identification is strongest when

the individual's alternative identities are less salient than his/her identity as an organizational

member and the individual's self-concept and perceived organizational identity have many

common attributes (Farooq et al., 2019; El Akremi, et al., 2018) . Hence, when investing in

CSR activities with the objective of benefiting the community at large as well as its own

employees, an organization enhances employees' identification as the employees may perceive

their organization as being socially responsible (Farooq et al., 2019) and belonging to this

organisation meets their own need to enhance their self-esteem (Bartel, 2001) which Maslow

identified as esteem needs.

Organisational Commitment

Organisational commitment is the “relative strength of an individual’s identification with and

involvement in a particular organization” (Mowday et al. 1982 p.27). Allen and Meyer (1990)

Mitonga-Monga & Hoole, (2018) defined employee commitment as a three dimensional

construct, affective, continuous and normative. Affective commitment which denotes ‘an

emotional attachment to, identification with the organisation’; continuance commitment is ‘the

perceived costs associated with leaving the organisation’; and normative ‘a perceived

obligation to remain in the organization’ (Brammer et al. 2007 p.21).

CSR can enhance organisational identification; in return will enhance organisational

commitment. Organisational commitment is associated with positive behavioural outcomes

(Farooq et al.,2019) – reduction in labour turnover and high employee satisfaction (Bergami

& Bagozzi 2000). Organisational commitment behaviour can be further explained by social-

exchange relationship which is developed when mutual exchanges occur; one party makes a

contribution and is expected that the other party develops a sense of obligation to reciprocate

(Blau, 1964; Masterson et al 2000; Mitonga-Monga & Hoole, 2018). The exchanged resources

could be financial or socio-emotional such as care, respect and loyalty (Aselage & Eisenberger,

2003). Literature suggests that when the employees are being looked after by their employer,

this would be reciprocated through organisational commitment (Shore & Wayne 1993

Mitonga-Monga & Hoole, 2018.). Recent meta-analytic studies show that all three forms of

commitment is associated with labour turnover and intentions to leave the organization but this

relationship is stronger with affective commitment (Mitonga-Monga & Hoole, 2018;

Mahmoud et al., 2017; Brammer et al. 2007; Meyer et al. 2002).

Increased commitment is paramount for a stable workforce (Steers 1977; Gond et al.,

2017. Steers conducted a study on two major professions that generally experience very high

turnover rates – hospital staff and engineers. It was found that organisational commitment is

significantly and inversely related to employee turnover, (Farooq et al., 2019; Gond et al.,

2017; Meyer et al. 2002). Recent research on CSR impact on employees (De Roeck & Farooq

2018; Hameed et al., 2016; Mahmoud et al 2017; Glavas and Godwin, 2013) found employees

associate themselves strongly with their organization when it is involved in social welfare

activities while employees who received support from their organization when carrying out

community services were more likely to feel strongly attached to the organization and

organisations with positive image are better able to attract suitable employees (Jones et al.,

2017).

Discussion and analysis

Analysis on CSR is quite embryonic and research on the influence of CSR practices on

employee commitments is even rarer (Mitonga-Monga & Hoole, 2018) . This is a desk-based

study of reviewing existing literature using the scoping review approach, review of recent

research publications, books and journal articles where the separate concepts were brought

together to build the conceptual framework of CSR and employee commitment. Moreover

news articles, employment trends proposed by economists were assessed to show the urgency

and relevance of this research. Following framework proposes that firms with excellent internal

and external CSR enjoy positive employee attitudes, employee pride, satisfaction which

eventually leads to high organisational commitment (De Roeck & Farooq 2018 ; Mitonga-

Monga & Hoole, 2018; Zhou et al., 2018; Gond et al., 2017;Hameed et al., 2016).

Proposed conceptual Framework: CSR and Organisational Commitment

This model addresses number of gaps in the literature and makes original and significant

practical contributions to the literature. Employee-Company fit concept has focused on the

term ‘employees’ as a whole and not differentiated their needs according to their employment

contracts or the position level in the organisation’s hierarchy. Although the labour force is

increasingly becoming highly skilled, due to the economic instability employers are more

interested in temporary workers than permanent staff. This framework will extend the

understanding of the employee-company relationships and provide practical inferences for

organisations to improve employee commitment levels in a dynamic economic situation.

This framework aims to elaborate that not all CSR activities are appealing or will

influence the employee commitment levels of the whole workforce and that there are

discrepancies (De Roeck & Farooq 2018; Mitonga-Monga & Hoole, 2018; Zhou et al., 2018;

Hameed et al., 2016). CSR is considered a higher order needs; employees that have not satisfied

their basic needs will not be influenced significantly by external CSR initiatives in particular.

For instance a large pool of temporary contractors in an engineering company may not be

influenced by the same CSR initiatives as permanent staff.

Once this model is empirically tested using mixed methods, it will explain to an extent

some of the inconsistent results found in the literature of the link between CSR and

organisational commitments

Suggestions for future research using the framework

Employee attraction and retention is a very important organisational success factor. The

proposed conceptual framework could be used by any industry, especially those with high staff

turnover such as mining in any country to explore how employee perception towards external

CSR [directed towards external stakeholders (Gond et al., 2017)] and perception towards

internal CSR [directed towards the own employees (Zhou et al., (2018)] can influence

organizational identification and commitment levels (Gond et al., 2017).

Australia is one of the well-placed countries to meet the growing global demand for

iron ore and energy resources driven by the continuing industrialisation and development of

the countries mainly in the Asia–Pacific region. Australia’s high expertise in exploration,

mining and processing not only present economic opportunities for the country but also major

challenges, particularly in the area of corporate social responsibility in this sector.

Mining industry has been struggling with high employee turnover rates and high costs

associated with it for a long time (Beach et al. 2003). Turnover is considered a norm in this

particular industry as it happens too often. Energy Skills Queensland reported, in 2013 the

labour turnover in Queensland mining sector was 23%. Of those, 18% left within the first 12

months of commencement. In 1996, labour turnover in the Australian mining industry was

20.2%, slightly below the national average of 21.2%. Ten years later the rate has risen to 23.5%,

whilst labour turnover rates in other in other industries had dropped to a national average of

18.4% (Peetz & Murray 2010).

Voluntary redundancy or resignations is the most harmful as this change is unforeseen;

it disrupts operations and performance (Boshoff 2000). Ongoing costs associated with labour

turnover are for recruitment, selection, training, loss of productivity due to missing staff, loss

of knowledge and work group synergy (Farooq et al., 2019; Beach et al. 2010; Chultz & Grimm

2008). It could also post a health and safety risk; increase in workplace accidents due to

insufficient training and experience and increased workload of remaining team members can

lead to fatigue and stress (Amponsah-Tawiah & Mensah 2016; Catano & Morrow Hines 2016;

Farooq M et al., 2019). Moreover, in a competitive economic environment, losing your

professional staff to other competitors in the industry can be detrimental (Chidyamakono 2010;

Trivellas et al., 2019).

Current technological changes in the mining sector has led to data-driven maintenance,

a crucial focus on safety has shifted the landscape of mining (Australian Mining 2019).

High rate of pay has not reduced the labour turnover rates in the mining sector in

Australia (Peetz & Murray 2010; Chidyamakono, 2010; Amponsah-Tawiah & Mensah

2016).High wages do attract workers to mining; however the employee turnover rates have

increased over the last decade (Peetz & Murray 2010). The labour turnover rates of 16

industries in 2006 indicated, for each $1 increase in hourly earnings, industry level labour

turnover falls by an average of 1.1%; however labour turnover in mining was well over 10%

above the rate predicted by its earnings level (Peetz & Murray 2010). Hence, increasing salary

packages might not be the long-term solution to reducing labour turnover.

Allen, Bryant, & Vardaman (2010)’s study yielded that pay is a weak predictor of

employee turnover and intention to leave, however organisational commitment is a stronger

predictor of employee turnover (Catano & Morrow Hines 2016, Farooq M et al.,2019). Zheng

et al (2007) interviewed several Australian mining company managers that provided insight

into strategic developments to reducing labour turnover, mainly employee well-being

programs. Some managers strongly believe that a comprehensive set of work-life balance

programs (Amponsah-Tawiah & Mensah 2016) have assisted in employee retention and

attracting talent amidst of war for talent in the mining sector in Australia. A manager said,

(Zheng et al 2007 p.11)

We have 7-day on and 7-day off. We have a number of people living on site. We bring

in health professionals, physiotherapists periodically, so they can spend time on regular

basis to improve people, to help them with their physical needs. People also work 4-

hour on, 4-hour off in a 12-hour shift, so they have sufficient rest….We also try to rotate

people... I think we must have done something right. We have a very low staff turnover

Commented [KDS1]: Is this necessary?

rate. We have significantly grown the staff number for the past two years; we only lost

two people within two years.

There is a need for empirical evidence and research to understand employee turnover in mining

and ways to improve retention in mining (Beach et al. 2003; Chidyamakono 2010). Amponsah-

Tawiah & Mensah (2016) investigated the relationship between the occupational health and

safety (OHS) and organizational commitment in the mining industry in Ghana and concluded

that OHS has a positive relationship with affective, normative and continuance organizational

commitment.

This proposed framework would be ideal in understanding the impact of CSR on

organisational commitment which is a strong predictor of employee turnover (Catano &

Morrow Hines 2016; Farooq et al., 2019; Amponsah-Tawiah & Mensah 2016) as it considers

OHS as one of the social responsibility factors and also the impact of internal CSR on the

mining employees which is vital to the sustainability of the sector.

What history has shown is that the corporation is no more acting in between owner and

the corporation. The reality has changed and their social responsibility has increased to include

all its stakeholders, specifically the employees in a morally acceptable way for a sustainable

future.

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